• Host moves into profit

Host Hotels & Resorts moved into profit in the second quarter, with net income at $20m, compared to a net loss of $69m in the previous year.

Revenue increased by 6% on the quarter to $63m, with the real estate investment trust said that adjusted Ebitda was $250m, a drop of $6m on the same period last year.

Revpar was up 8.1%, due to higher occupancy, which rose six percentage points. Average daily rate fell 0.7%, although improved by close to 3%, the first growth since the second quarter of 2008.

The group's European joint venture saw revpar increase 5.6% for the quarter. Occupancy increased 8.1 percentage points and ADR declined 5.8%.

For the full-year, the group expects revpar to increase by between 4% and 5.5%. Net loss is forecast at $152m to $129m, with adjusted Ebitda between $795m and $825m. In April the company had forecast a revpar increase of 1% to 4%.

Ed Walter, president & CEO, said: "We are seeing demand recover specifically in our higher rated business segments for both group and transient. This is an extremely positive sign and suggests that hotels were becoming less reliant on discount as demand continues to strengthen."

The announcement came as the group acquired the Le Meridien Piccadilly hotel from Starman Hotels for £64m. Walter said: "We will continue to aggressively look for investment opportunity, both domestically and internationally.

"We are seeing some interesting opportunities in the Europe right now and are pursuing those. We also have some other things in the pipeline in Asia although nothing that we obviously were prepared to announce at this point in time, and we have a number of things that we're looking at in the US too."

 

HA Perspective: The most interesting thing about Host's announcement was the deal in Asia with Accor and InterGlobe. This was struck with Host's JV vehicle with GIC, Pacifica Partners.

It involves seven hotels valued at $325m, with Pacifica holding 36%, and Accor and InterGlobe 32% each. What stands out is that Host is buying into both the Novotel and Ibis brands, a clear statement that it is not just pursuing the upscale product it has historically.

Two other deals were also announced but these were both in the US and both involved upper upscale properties in the shape of a W in New York and a Westin in Chicago.

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